Private-Equity Property Fundraising at Lowest Since 2003

Private-equity fundraising for real estate dropped to the lowest level in almost a decade as the process of collecting capital from investors lengthened to more than double the time spent in 2007, Preqin Ltd. said.

About $5.2 billion was raised globally by 20 closed-end funds, a 79 percent decline from the previous three months and the lowest since the third quarter of 2003, the London-based research firm said today in a statement. Funds that held final closings in the period were marketed for an average of 18.7 months, compared with 9.2 months in 2007, near the commercial real estate market’s peak, Preqin said.

“Although investor appetite for private real estate funds has increased in recent months, competition for limited partner commitments remains intense and fundraising for most managers is a long, difficult process,” Andrew Moylan, Preqin’s head of real assets products, said in the statement.

Boston-based Rockpoint Group LLC had the biggest final closing of the first quarter, a $1.95 billion fund for distressed and value-added property in the U.S., U.K. and Japan, according to Preqin. Prime Finance Partners LLC, based in New York, followed with a $621 million U.S. debt fund, and Birmingham, Alabama-based Harbert Management Corp. was third with a 254 million-euro ($326 million) European fund.

Funds with a North America focus raised the most capital, with 12 receiving commitments of a combined $3.7 billion, Preqin said. Five Asia-focused funds got $776 million and three Europe funds got $756 million, according to the research firm, which compiles data that it sells to alternative-asset managers.

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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